Welcome to edition seventy four of Insider Weekends. Insider buying increased with insiders purchasing $38.1 million of their stock last week compared to $22.2 million in the week prior. Selling also increased with insiders selling $1.4 billion worth of stock compared to $987.1 million in the week prior.
Sell/Buy Ratio: The insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by total insider purchases that week. The adjusted ratio for last week dropped down to 37.1. In other words, insiders sold more than 37 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the week prior when the ratio stood at 44.4. We are calculating an adjusted ratio by removing transactions by funds and companies and trying as best as possible only to retain information about insiders and 10% owners who are not funds or companies.
Insider Sell Buy Ratio November 4, 2011:
Note: As mentioned in the first post in this series Introduction to Insider Weekends, certain industries have their preferred metrics such as same store sales for retailers, funds from operations (FFO) for REITs and revenue per available room (RevPAR) for hotels that provide a better basis for comparison than simple valuation metrics. However metrics like Price/Earnings, Price/Sales and Enterprise Value/EBITDA included below should provide a good starting point for analyzing the majority of stocks.
Notable Insider Buys:
1. Jefferies Group, Inc. (JEF): $12.07
Director Joseph S. Steinberg acquired 1.5 million shares of this investment bank, paying $11.68 per share for a total amount of $17.5 million. These shares were purchased indirectly by Leucadia National Corporation.
Jefferies has come under pressure this week following the implosion of MF Global and trading in this stock was halted twice. This large purchase by Leucadia along with two statements issued by the company on Wednesday appears to have appeased investors. For now, it might not matter how cheap the stock looks if there is a crisis of confidence.
We have mentioned Leucadia’s purchases in the past and we wrote the following in mid-April,
This purchase was part of a $500 million secondary stock offering by Jefferies. I normally exclude purchases related to secondary offerings as well as purchases by corporate entities like Leucadia. However I decided to include this purchase because Leucadia is a publicly traded holding company that is also sometimes referred to a “mini Berkshire Hathaway”.
Mr. Steinberg is the President of Leucadia and his Harvard Business School classmate from the class of 1970, Ian Cumming, is the Chairman of the company. Mr. Steinberg and Mr. Cumming both serve on the board of directors of Jefferies. Following this purchase and stock offering, Leucadia will own 27.54% of Jefferies’ outstanding shares.
Besides this purchase, Leucadia has purchased shares of Jefferies several times since last May. Several insiders have exercised options without turning around and selling them immediately. The only insider sale over the last six months was a 9,645 shares sale by the CFO in February as you can see from this page. The CFO sold those shares to raise funds to pay the taxes associated with the vesting of shares.
You can view the list of recent insider transactions for Jefferies Group, Inc. here.
|P/E: 8.19||Forward P/E: 8.16||Industry P/E: 12.76|
|P/S: 0.95||Price/Book: 0.83||EV/EBITDA: N/A|
|Market Cap: $2.66B||Avg. Daily Volume: 3,897,620||52 Week Range: $9.79 – $27.12|
2. The Coca-Cola Company (NYSE:KO): $67.78
Director Barry Diller acquired 100,000 shares of Coca-Cola, paying $67.11 per share for a total amount of $6.7 million. Mr. Diller increased his stake by 6.11% to 1,736,000 shares with this purchase.
You can view the list of recent insider transactions for The Coca-Cola Company here.
|P/E: 12.46||Forward P/E: 16.29||Industry P/E: 15.84|
|P/S: 3.39||Price/Book: 4.69||EV/EBITDA: 13.83|
|Market Cap: $153.94B||Avg. Daily Volume: 11,958,600||52 Week Range: $61.29 – $71.77|
3. SLM Corporation (NASDAQ:SLM): $14.16
Shares of this student loans provider were acquired by 2 insiders:
- Vice Chairman & CEO Albert L. Lord acquired 100,000 shares, paying $13.70 per share for a total amount of $1.4 million. Mr. Lord increased his stake by 24.68% to 505,195 shares with this purchase.
- Director Ronald F. Hunt acquired 1,800 shares, paying $42.00 per share for a total amount of $75,600. Mr. Hunt increased his stake by 57.78% to 4,915 shares with this purchase.
You can view the list of recent insider transactions for SLM Corporation here.
|P/E: 14.02||Forward P/E: 7.3||Industry P/E: 11.2|
|P/S: 3.26||Price/Book: 1.71||EV/EBITDA: N/A|
|Market Cap: $7.21B||Avg. Daily Volume: 7,010,920||52 Week Range: $10.91 – $17.11|
4. Digital Realty Trust Inc. (NYSE:DLR): $63.61
CEO and Director Michael F. Foust acquired 40,000 preferred shares of this office-REIT, paying $25.00 per share for a total amount of $1 million. This is a late filing as these shares were purchased on September 15, 2011.
You can view the list of recent insider transactions for Digital Realty Trust Inc. here.
|P/E: 51.17||Forward P/E: 14.42||Industry P/E: 24.39|
|P/S: 6.3||Price/Book: 3.43||EV/EBITDA: 16.28|
|Market Cap: $6.62B||Avg. Daily Volume: 1,394,260||52 Week Range: $47.42 – $65.01|
5. Flowserve Corp. (NYSE:FLS): $99.8
President & CEO Mark A. Blinn acquired 7,000 shares of this diversified machinery company, paying $91.35 per share for a total amount of $639,463. Mr. Blinn increased his stake by 11.45% to 68,116 shares with this purchase.
Mark A. Blinn has served as a director and as President and Chief Executive Officer at Flowserve since October 2009. This is the first insider purchase at Flowserve is over a year. The stock lost almost half its value since April and bottomed at the $70 level in September before rebounding strongly. Third quarter results were better than expected with revenue up 15% Y-o-Y to $1.12 billion and earnings up 4% to $1.92 per share. The company appears to be reasonably valued at about 8 times EBITDA.
You can view the list of recent insider transactions for Flowserve Corp. here.
|P/E: 13.5||Forward P/E: 11.37||Industry P/E: 12.12|
|P/S: 1.25||Price/Book: 2.37||EV/EBITDA: 8.33|
|Market Cap: $5.54B||Avg. Daily Volume: 796,977||52 Week Range: $66.84 – $135.72|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Ultimate Software Group, Inc. (NASDAQ:ULTI): $63.57
Shares of this software-as-a-service (SAAS) provider were sold by 6 insiders:
- Vice-Chairman & COO Marc D. Scherr sold 77,275 shares for $59.78, generating $4.6 million from the sale.
- Chairman, President and CEO Scott Scherr sold 56,760 shares for $59.43, generating $3.4 million from the sale.
- Director Robert Yanover sold 40,769 shares for $59.14, generating $2.4 million from the sale. 2,627 of these shares were sold indirectly through GRAT.
- Exec. VP, CFO and Treasurer Mitchell K. Dauerman sold 27,282 shares for $59.78, generating $1.6 million from the sale.
- Director James A. Fitzpatrick sold 9,540 shares for $60.14, generating $573,736 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
- Director Leroy Vander Putten sold 6,500 shares for $59.85, generating $389,025 from the sale.
You can view the list of recent insider transactions for Ultimate Software Group, Inc. here.
|P/E: 492.79||Forward P/E: 61.12||Industry P/E: 38.64|
|P/S: 6.31||Price/Book: 20.77||EV/EBITDA: 66.66|
|Market Cap: $1.64B||Avg. Daily Volume: 276,686||52 Week Range: $41.06 – $64.27|
2. NetLogic Microsystems Inc. (NASDAQ:NETL): $49.3
President and CEO Ronald Steven Jankov sold 250,000 shares of this fabless semiconductor company for $49.08, generating $12.3 million from the sale. 150,000 of these shares were sold indirectly by Globallink 1 Capital and 100,000 of these shares were sold as a result of exercising options immediately prior to the sale.
You can view the list of recent insider transactions for NetLogic Microsystems Inc. here.
|P/E: N/A||Forward P/E: 27.39||Industry P/E: 17.25|
|P/S: 8.37||Price/Book: 5.29||EV/EBITDA: 32.09|
|Market Cap: $3.43B||Avg. Daily Volume: 3,355,840||52 Week Range: $25.83 – $49.39|
3. Apple Inc. (NASDAQ:AAPL): $400.24
Shares of Apple were sold by 2 insiders:
- Director Arthur D. Levinson sold 15,000 shares for $396.97, generating $5.9 million from the sale.
- Senior Vice President Jeffrey E. Williams sold 3,500 shares for $397.33, generating $1.4 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
You can view the list of recent insider transactions for Apple Inc. here.
|P/E: 14.46||Forward P/E: 10.38||Industry P/E: 14.63|
|P/S: 3.46||Price/Book: 4.89||EV/EBITDA: 9.73|
|Market Cap: $371.93B||Avg. Daily Volume: 22,121,000||52 Week Range: $277.77 – $422.86|
4. Fastenal Company (NASDAQ:FAST): $40.27
Director Robert A. Kierlin sold 100,000 shares of this industrial and construction products supplier for $39.11, generating $3.9 million from the sale.
You can view the list of recent insider transactions for Fastenal Company here.
|P/E: 35.64||Forward P/E: 28.97||Industry P/E: 13.28|
|P/S: 4.48||Price/Book: 8.41||EV/EBITDA: 20.12|
|Market Cap: $11.89B||Avg. Daily Volume: 3,064,950||52 Week Range: $25.45 – $40.48|
5. Apollo Group Inc. (NASDAQ:APOL): $47.24
Shares of this for-profit education company were sold by 2 insiders:
- Vice Chrmn of the Board Peter V. Sperling sold 41,767 shares for $48.60, generating $2.03 million from the sale.
- Exec Chrmn of the Board John G. Sperling sold 33,533 shares for $47.99, generating $1.6 million from the sale.
You can view the list of recent insider transactions for Apollo Group Inc. here.
|P/E: 11.7||Forward P/E: 12.91||Industry P/E: 12.06|
|P/S: 1.31||Price/Book: 4.98||EV/EBITDA: 3.89|
|Market Cap: $6.17B||Avg. Daily Volume: 2,043,160||52 Week Range: $33.75 – $54.23|
You can view the full list of sales from this Insider Sales page.